In a recent opinion, the D.C. Circuit Court of Appeals meted out a blistering rebuke of the nonacquiescence policy of the National Labor Relations Board (the “Board”). The rationale underlying the Board’s policy, and a similar policy of many federal agencies (e.g., the Consumer Financial Protection Bureau), is that adverse case law in any given circuit is not “final” until the Supreme Court rules on the subject. The D.C. Circuit, and other courts, have historically accepted the nonacquiescence policy under two conditions: (1) when the agency is seeking Supreme Court review to get a final ruling; and (2) when the agency clearly asserts its nonacquiescence to the court where the adverse case law exists. In this case, though, the D.C. Circuit determined that the Board’s conduct and arguments failed to assert nonacquiescence properly. This constituted bad faith sufficient to justify an award of attorneys’ fees to the party victimized by the Board’s conduct in this case.

The underlying case involved Heartland Plymouth Court MI, LLC and its refusal to bargain over the effects of reducing employee hours. The Board had found Heartland in violation of Section 8(a)(5) of the National Labor Relations Act, but the D.C. Circuit had longstanding precedent stating that an employer need not bargain over a subject already contained in the collective-bargaining agreement. The merits of this dispute, however, are far overshadowed by the language used to criticize the Board.

The Court concluded that the Board had improperly used the nonacquiescence policy, because it: (a) failed to seek transfer of the appeal to a circuit with favorable precedent; (b) failed to provide a candid explanation of the Board’s disagreement with the case law of the D.C. Circuit; (c) failed to preserve arguments here and historically for appeal to the Supreme Court; and (d) failed to seek certiorari to the Supreme Court.

The Court explained that improper use of nonacquiescence allows federal agencies to “work their will on not only the courts but on the American people, too. . . [T]he Board’s conduct before us [the D.C. Circuit] manifests a stubborn refusal to recognize any law.” In other words, “the Board’s longstanding ‘nonacquiescence’ toward the law of any circuit diverging from the Board’s preferred national labor policy takes obduracy to a new level. As this case shows, what the Board proffers as a sophisticated tool towards national uniformity can just as easily be an instrument of oppression.”

Further, the Board’s use of nonacquiescence allows the Government to say “we do not care what the law says.” The Board can make unwarranted legal arguments, and does not need to make good faith arguments for the modification or revision of existing law, like every other citizen or litigant is required to do.

According to the D.C. Circuit, the conduct by the Board “is intolerable.”

Weiner Brodsky Kider PC regularly represents mortgage lenders, servicers and other mortgage-related companies throughout the United States before federal agencies.